Between 2024 and 2032, 18.4 million workers with postsecondary education are expected to retire, outpacing the 13.8 million younger workers entering the labor market with similar educational qualifications. At the same time, the U.S. economy is expected to add 685,000 new jobs requiring postsecondary education and training.
These challenges, among others, are leading the U.S. into a skills shortage crisis, according to a new report from the Georgetown University Center for Education and the Workforce (CEW).
Part of the problem is the “demographic cliff” — the number of high school graduates is expected to decline by 10% by 2037, meaning there will be fewer workers overall.
Also, the number of people enrolling in college and earning a degree – whether an associate or bachelor’s degree – is declining, due in part to rising college costs and a change in the perception of the value of postsecondary education.
While the U.S. Education Department projects that college enrollment will increase by 8.4% from 2021 to 2031, total enrollment likely will still be lower than it was in 2010, when 21 million students were enrolled. And that doesn’t even touch on the gaps in college enrollment and completion by race/ethnicity.
Why it matters
Postsecondary education often is associated with higher rates of labor-force participation. Those with higher levels of educational attainment have more job opportunities and often stay in the workforce longer, which “underscores how education not only shapes opportunity for younger workers but can also extend opportunity for those in later life stages,” the report says.
Of note, labor-force participation has hovered between 62% and 63% since the beginning of 2022 – down from a peak of 67.3% in 2000.
Another factor contributing to concerns about skills shortages is changes in skills requirements for occupations. For example, in 1983, only 32% of jobs required education and training beyond high school, but by 2022, that number had climbed to 68%. The report’s researchers project that, in 2031, 72% of jobs will require at least some postsecondary education and/or training.
Eye on AI
Also, the effects of artificial intelligence on employment remain murky. According to long-range forecasts, AI likely will generate some employment gains, but also cause painful dislocations for many workers.
Another challenge noted in the report is that “K–12 academic performance is slipping,” meaning “too many high school graduates are unprepared for the academic rigor of four-year degree programs,” and increasingly restrictive immigration policies, which make hiring more difficult.
Affected occupations
For the report, CEW analyzed 561 occupations and found that 171 of them will face skills shortages through 2032.
Managerial positions will face the largest projected shortage (2.9 million through 2032). Though there’s no single path or credential that leads to management jobs – many are promoted from within organizations – 82% of managers have more than a high school diploma, and 56% of managers have a bachelor’s degree or higher.
Teachers and nurses also make the list of occupations with projected large shortages. The report notes a potential shortfall of 611,000 teachers through 2032, though there is a predicted surplus of preschool and kindergarten teachers and tutors.
And there’s a projected shortage of 362,000 nurses and 42,000 licensed practical nurses (LPNs) through 2032. Enrollment in nursing programs has slowed since the pandemic, and programs aren’t growing due, in part, to difficulty finding faculty.
There’s also a projected shortage of 402,000 driver/sales workers and truck drivers through 2032 – which are jobs that typically don’t require a bachelor’s degree. However, this isn’t a case of people not having the right skills; more than 10 million Americans held a commercial driver’s license (CDL) in 2019. “So, while many Americans are qualified to take truck driving jobs, many workers do not want them,” the report says.
The construction industry will see shortages of skilled workers, too: 200,000 projected through 2032. In this case, entry-level construction workers are plentiful, but some skilled roles, such as carpentry and construction managers, are getting harder to fill.
Possible solutions
Increasing workforce participation is one strategy to help address skills shortages, according to the report.
“If the U.S. could bring the labor-force participation rate (LFPR) back to its high of 67.3% in 2000 and the unemployment rate to 4.1% (as it was in the same year), the workforce would increase by 12 million, more than double the number of workers needed to fill projected shortages through 2032,” the report says.
But that alone won’t be enough. More education and training for these potential workers is also necessary, for both new workers and those coming back to the workforce who need to update their skills. This would require substantial investments from policymakers and advocates.
Providing subsidized childcare, better wages, benefits and opportunities can help, too, particularly with attracting discouraged workers.
In addition, educational attainment gaps by race/ethnicity and socioeconomic status must be addressed. Implementing targeted policies and allocating sufficient resources to support educational progress can help mitigate the growing skills shortage and ensure a more equitable, skilled future workforce, the report suggests.
“Skills shortages present an opportunity for millions of workers, particularly those from low-income households and marginalized racial/ethnic groups, to gain better access to economic opportunity, and for American industries to connect with enormous untapped talent,” co-author and CEW Director Jeff Strohl said in a release. “The transition to a majority-minority population has already occurred among American youth. As a result, addressing the skills gap will require teaching and counseling strategies that are adaptable and responsive to the evolving socioeconomic and racial/ethnic demographics of our classrooms.”
The report also recommends studying the expansion of skills-based hiring, which has gained traction in recent years, as well as using technology to increase worker productivity and expanding visa programs to prioritize immigrants with in-demand skills.
